15th December (Issue 277)

Welcome to the Origin Capital Weekly Irish Property Review. This update is designed to provide you with a full recap of the latest property news from the media over the last seven days.

MIXED-USE

South Circular Rd, Dublin 8 Hines and APG have submitted a fast-track planning application to An Bord Pleanála for Phase 2 of their Player Wills development on South Circular Road, Dublin 8. The development will include 732 new residential units, two new parks and an artistic centre. A key aspect of phase two will be the retention and transformation of the iconic former Player Wills factory as a new mixed-use space. It will accommodate 287 new residential units, of which 240 will be new shared living industrial-style loft units with dedicated tenant amenities, including c.11,000 sq.ft. of living space. The shared living units will be different from co-living units in two respects: while they are single-occupancy units, they will extend to an average of c.258 sq.ft. each, compared to the minimum of c.129 sq.ft. for co-living. The Business Post, 13^th December

Phibsborough, Dublin 7 MM Capital has submitted an amendment to its planning application for the redevelopment of Phibsborough shopping centre in Dublin 7. Instead of the 334-bed student accommodation section, there will be a 321-bedroom shared living component extending to over 129,000 sq.ft. It will also accommodate over 21,500 sq.ft. of communal/shared amenity space. These amenities will include a gym, lounges, wellness spas, a café and co-working space. The centre piece of the redevelopment is a new public plaza which will become the village centre of Phibsborough. It will also connect into Dalymount Park once that is redeveloped. The Business Post, 13^th December

The Business Post understands that Hines King Street has filed High Court proceedings against Dún Laoghaire-Rathdown County Council over a dispute related to the funding of €57 million worth of public infrastructure. Hines, the property developer, and King Street Capital, the private equity fund, are the partnership behind the Cherrywood strategic development zone (SDZ) project in Dublin. The Business Post understands that Hines King Street initiated the proceedings after the council did not adhere to the terms of a pre-agreed development contribution scheme which was adopted by the local authority in June 2017. Under the arrangement, Hines King Street would be entitled to offset the cost of constructing common infrastructure against future development contributions. The €57 million investment in the Cherrywood area by Hines King Street has created 5.5 kilometres of new roads, pathways and cycle ways. Three new parks have also been created in the SDZ. The Business Post, 13^th December

HOSPITALITY

EY benchmark analysis based on the STR data for 10 different European countries has found that hotel occupancy rates in Dublin were 56% lower than region hotel occupancy rates during the last week of July and second week of September 2020. This trend is also witnessed in Europe, as occupancy rates in main capital cities are on average 41% lower than their regional counterparts.

Irish regional hotels have performed relatively well during the summer period analysed with a 54% occupancy rate, outperforming their European counterparts. Dublin hotels have underperformed with a 24% occupancy rate compared with 38% in Berlin.

Ireland’s relative urban tourism weakness is a result of three main factors. As a small island economy, the levels of business tourism are very high, especially into Dublin where a significant proportion of Ireland’s most successful businesses are located. Irish residents with a higher purchasing power are located in Dublin and would be the ones driving the domestic tourism market. They decided to leave Dublin to work remotely or holiday. Lastly, overseas visitors were driven away by the quarantine measures introduced. EY: What now for city tourism?  December 2020

OFFICE

Cork City Ibec are to set up a ‘Munster hub’ in Cork’s Penrose Dock office development. Ibec confirmed they will lease 5,000 sq.ft. at Penrose Dock 1, aiming to take occupation in the second quarter of 2021. The announcement brings the occupancy level of the 250,000 sq.ft. quayside scheme to 80%. Ibec joins the likes of Varonis, Minelab, Remitly, Qualcomm, Sophos, Cloudera, Grant Thornton, Matheson and Flexispace, at the Wilson Architecture-designed Penrose Dock 1 and 2 buildings on 1.7 acres. The Irish Examiner, 10^th December

RESIDENTIAL / LAND

Clontarf, Dublin 3 A private Irish investor has purchased 18 apartments at Tudor House and Beechfield House in Clontarf, Dublin 3 for €4.5 million (€250k per unit). The Tudor House and Beechfield House development is located on Oulton Road just off Clontarf Road. Two of the apartments were sold when the scheme was completed by its developer and vendor in 2005. Consequently, the investment comprises nine apartments within the redeveloped period buildings and nine apartments within the modern block. The portfolio consists of nine one-bedroom apartments and nine two-bedroom apartments. The investment is currently generating a gross annual rental income of c.€243,000, this is expected to increase to €267,000 per annum once the vacant show unit is re-let at its estimated rental value of €2,000 per calendar month. The Irish Times, 9^th December

Phoenix Park, Dublin 15 Ires Reit is to acquire 146 apartments at the Phoenix Park Racecourse in Dublin 15 for €60 million (c.€411k per unit). The deal includes a mix of apartments, duplex units and houses, including 20 one bed and 113 two bed units. Most of the residential units were built in 2002-2007, with 26 constructed this year in a block overlooking the Phoenix Park. At present, some 137 of the residential units are currently rented, with nine residential units available for immediate rent. Rents at two-bed units in the development are currently on the market for c.€1,850 – €2,025 per month. The Irish Times, 14^th December

Social Housing UK insurance company Legal & General has teamed up with housing agency Clúid to invest €54 million in social housing projects in the Republic. The deal, which will deliver c.200 social homes, marks the first large-scale investment in social housing here by a big international player and the first time an approved housing body (AHB) has secured financing on this scale from a private entity. Delivery of the new homes financed through the agreement is expected to begin in the first quarter of next year, and most are expected to be located in the high-demand urban centres of Dublin and Cork. The Irish Times, 14^th December

Blackrock, South Dublin Lioncor, a joint venture between Alanis Capital and US private equity company Oaktree, has paid c.€16 million for a prime residential holding immediately adjoining Blackrock College in Dublin. The Cross Avenue site (3 acres) also includes two residential properties, Tower Green and Clareville, with extensive frontage (158m) on to Cross Avenue, close to its junction with Mount Merrion Avenue. The property is located 7.5km southeast of Dublin city centre. The lands were put up for sale in May 2019 by agent Avison Young (formerly GVA Donal O’Buachalla) at a guide price of €20 million. The Irish Times, 9^th December

Residential Planning Permission Planning permissions for houses and apartments jumped 22% in the third quarter as the construction industry rebounded from the first Covid-19 lockdown. Central Statistics Office (CSO) figures show the number of planning permissions granted for dwelling units between July and September was 12,942, of which 7,214 were apartments and 5,728 were houses. This represented an annual increase of 22.2%. The number of apartment units granted planning (7,214) was up 27.5%. The Irish Times, 11^th December

Housing Supply According to an analysis of the housing market conducted by the Banking and Payments Federation Ireland (BPFI), housing supply is unlikely to meet demand until at least the end of 2023. The Federation concludes the number of completions will exceed 19,000 units for the year in comparison to c.21,000 in 2019. The Federation estimate that 35,000 new units would need to be constructed per annum to keep up with demand and that this will not be achieved until 2023. The Irish Times, 8^th December

RETAIL

Swords Central Shopping Centre The Irish Times understands that a fund managed by Davy Real Estate has purchased the Swords Central Shopping Centre in Dublin for c.€11 million. The purchase price represents a significant discount on the €21.5 million guide price when it was initially brought to the market in September 2018. The scheme produces a rental income of €1.3 million from 12 shops, with 30,000 sq.ft. of retail accommodation and a 320-space car park producing an average annual income of €280,000. The Irish Times, 9^th December

Retail Sector It is projected that the year-end investment turnover figures for retail will represent a record low 2.5% of an anticipated total investment market turnover of €3 billion. This from a sector that represented 24% of investment turnover for the last decade (to 2019), but descending rapidly from a high of 53% in 2016 to a previous record low in 2019 of 9%. Unsurprisingly for 2020 High Street retail has been worst affected with Grafton Street experiencing a 66% reduction in footfall for March to October. While the street’s footfall figures had been holding steady at 25 million for the last two years, the 2020 outcome will be closer to 13 million. 65% of the limited 2020 retail investment transactions were grocery deals. The Irish Times, 13^th December

INDUSTRIAL

The industrial and logistics sector has seen a change in attitude from the investment community over the last few years with the influx of international private equity companies competing for much of the available industrial and logistics stock in Dublin, both vacant and tenanted. This competition has intensified in recent months, and looks set to continue with trends such as accelerated e-commerce uptake and population growth providing investors with confidence in the long-term future of the sector. Take-up in Dublin in 2020 is unlikely to reach the 3.5m sq.ft. achieved in 2019, but this will be as a result of supply levels being unable to meet the demand in the market. There are currently just five modern, warehouse units of 20,000 sq.ft. or greater for sale or to let and available for immediate occupation in the entire Dublin market. The Irish Times, 15^th December

OTHER

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